The secret behind Nokia Microsoft deal spilled up

As we all know, cell phone giant Nokia has teamed up with Microsoft to build an ‘iPhone killer’. As a result, soon the tech industry will soon witness millions of Nokia handsets powered with Microsoft’s Windows Phone 7 platform. In return, the Redmond giant Microsoft will shower Nokia with billions of dollars for marketing, manufacturing and other expenditures.

The proposed deal is surpassingly the biggest merger in mobile world, where two bigwigs Nokia and Microsoft join hands. The deal is made to relinquish the dominance of Apple’s iOS and Google’s Android. Both Nokia and Microsoft are ready to reap great benefits with their new partnership. However, it has been argued that this coalition can also go haywire as the Finnish handset maker is slowly losing its charm in mobile world and even Microsoft has yet to re-gain its mettle.

The secret behind the deal

From the plan disclosed, it is expected that Nokia and Microsoft will combine their assets and jointly develop and market mobile products. Also, Nokia’s Maps will become a significant part of Microsoft’s services while Microsoft’s development tools will create apps for Nokia Windows’ powered phones.

Under the hood, both the techies have streamlined their financial details of their “broad strategic partnership” to make Windows Phone 7 the chief operating system for Nokia phones. Broadly, Nokia will pay royalties for licensing the phone software, while Microsoft in return will invest in marketing and development of devices.

Analysts believe that the Microsoft licensing agreement is complicated. It may subsequently affect Nokia’s revenues. It is also expected that Nokia may face a dip in the revenue, which alone could be worth $1.25 billion a year.

Asset transfer

Following the motto of partnership, both the bigwigs will bring something into the deal. Where Nokia will bring in its “tremendous brand,” Microsoft will bring the Windows Phone 7 software as well as utility brands including Office, Xbox Live and Bing.

And, it is quite possible that Nokia will launch its own app store for new devices.

Nokia gets divided

After the deal, Nokia will have two entities; Smart Devices and Mobile Phones. Nokia has declared Jo Harlow as the head of Smart Devices unit and Mary McDowell would head the latter unit, while it appointed Chris Weber as president of its US unit.

Symbian, MeeGO are still with Nokia

For the current year, the Finnish handset maker, Nokia will bring out devices on MeeGo, a high- end operating system developed with Intel Corp. Despite Nokia CEO’s announcement about using Microsoft’s Windows Phone OS, Nokia is planning to ship around 150 million handsets based on its own operating system, Symbian by year end.

However, how this team up will work to obtain prolific product, only time will decide. Till then, let’s hope for the best.